#8. Jason Hill on the Climate Consequences of the Renewable Fuels Standard

Recently, I spoke with Dr. Jason Hill of the University of Minnesota about a recent paper published in Energy Policy on “Climate Consequences of Low-Carbon Fuels: the United States Renewable Fuel Standard.” What follows are a few highlights from the discussion.

On How the Paper Came About:

“So, my co-authors and I were interested in the Renewable Fuel Standard and whether it will deliver on one of its intended effects which is reducing greenhouse gas emissions. Now there is all this interest in exploring what’s known as the indirect land use change effects of biofuels. This is when you get biofuels from cropland that is already producing food whether increased food prices that result lead to land clearing in other areas that leads to increased greenhouse gas emissions. There has been a lot of interest in that.

 

But, there has been a lot less interest in an even more fundamental question about biofuels. That is whether producing more biofuels is an effective means of reducing greenhouse gas emissions by displacing fossil fuels. There is this implicit assumption in most every lifecycle assessment that has been done, including those with EPA, that for every gallon of biofuel you produce you displace a gallon of fossil fuel on an energy equivalent base. So, producing megajoule of biofuel you offset a megajoule of gasoline or diesel. And this has we know from basic economics may not be a valid assumption. When you add more fuel to the market you tend to reduce prices.

 

Lower prices leads to greater use, and so what we did in this paper as we looked at estimates from other authors of what this fuel market rebound effects is. We found biofuels only offset about most half a gallon of petroleum based fuels for every gallon of biofuels that was produced. Another way of looking at that is producing a gallon of biofuels leads to the ultimate consumption of 1.5 gallons of total fuel. So, this obviously has some serious implications for whether biofuels are effective at reducing greenhouse gas emissions.

 

…What we did is we said let us consider this fuel market rebound effect and we saw then that even if you assume that the biofuels hit their greenhouse gas reduction targets individually the collective impact with the fuel market rebound market effect of the Renewable Fuels Standard is that you increase greenhouse gas emissions. In other words, you have a policy that almost by design is going to increase greenhouse gas emissions. It is a serious problem, one that needs rethinking of how our strategies for how we can reduce greenhouse gas emissions.”

On the Researchers’ Surprise at the Size of the Rebound Effect:

“I think what is surprising is that the effect is large as it is and that the Renewable Fuel Standard which is designed to reduced greenhouse gas emissions increases them and that is the problem. But then again when you use to go back and look at what the real motivation for the Renewable Fuel Standard…for a long time now we have known that most biofuels do not deliver. Their intended effect, corn ethanol, for instance, even without this fuel market rebound effect has not been shown to be less greenhouse gas intensive than gasoline.”

On Why A Carbon Tax May Be Advisable (but Not Politically Palatable):

“Let us target greenhouse gas emissions rather than put our eggs in the basket of producing more liquid fuels with all sorts of potential consequences that may not move in the right direction. We have an opportunity here to move toward strategies that are more likely to have their intended effects and who’s to say that either one of these fields is where transportation will be in the future, low carbon, no electricity. For instance electric vehicles may be where we want to go because of the potential reduction in carbon emissions as well as other air pollutants that are directly tied to premature mortality and other health causes. Ultimately, if you could reduce any emissions coming from a vehicle you are much more likely to have your intended effect which is reduced environmental and health impacts of transportation. In that case setting up a carbon tax system allows for those options to also play in this game. You are not locking yourself into a biofuel industry that may or may not have its intended effect.”

On Future Policy Considerations for Biofuels:

“Focusing on say, aviation, as the industry for which policy promotes the use of biofuels may make more sense but what we do need to do is start think much more realistically about which biofuels are more likely to deliver carbon reductions with very low carbon footprints and move away from first generation fuels like corn ethanol that are based on political interest not on environmental or national security interests.”

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